The VN30, tracking the city's top 30 shares, retreated 1.36 per cent to 542.08 points.

Only three stocks rallied, including Eximbank (EIB), PetroVietnam Drilling Services (PVD) and Sacombank (STB); while Bao Viet Holdings (BVH), Kinh Do Confectionery (KDC), private equity group Masan (MSN), Vietcombank (VCB) and Vinamilk (VNM) were among the 26 shares that slid in value.

VNM yesterday lost VND7,000 (about 5 per cent of its value), achieving the fastest decline within a year.

With the exception of software developer FPT (FPT), selling pressure from foreign investors was the major cause in the fall in blue chips, said Bao Viet Securities Company analyst Nguyen Xuan Binh.

Similar to divestment trends in late June, the sell off by foreign investors this time appeared in emerging markets amid news the US Federal Reserve would cut its QE3 (quantitative easing) programme.

"However, the impacts of foreign divestment to the Vietnamese market will not be large," Binh said, "as the characteristics of Viet Nam's economy is different".

Whilst the domestic market has experienced a decline since 2009, some economic indicators have recovered after periods of instability, he added.

He expected the impacts would last in the short-term.

On the Ha Noi Stock Exchange, the benchmark HNX-Index slid 0.7 per cent to 61.42 points. The HNX30, representing the bourse's 30 largest shares by capitalisation and liquidity, also fell 0.54 per cent to 114.32 points.